The One, Big, Beautiful Bill: 5 tax changes that will impact entrepreneurs and small businesses

July 10th, 2025

“The One, Big, Beautiful Bill” was officially signed into law by President Donald Trump on Friday, July 4, 2025. This sweeping move could reshape the financial landscape for entrepreneurs and small business owners, which was designed to simplify, incentivize, and—yes—challenge the way business gets done.

Whether you're launching a startup or scaling a growing enterprise, understanding these updates is essential to staying ahead and making informed decisions in a shifting economic environment.

Here are five major tax changes now enacted into law that could have a substantial impact on entrepreneurs and small business owners.

  1. Permanent 100% Bonus Depreciation – Eligible business equipment and property placed in service after January 19, 2025, can now have their full cost deducted in the year they are put into service subject to limitation. This allows businesses to retain more capital in the early stages of asset acquisition, which can be used for reinvestment, expansion, or hiring, contributing to business growth and long-term success.
  2. Section 199A Qualified Business Income (QBI) Deduction – Makes permanent the 20% QBI deduction, increases phase-in income limits to $75,000 ($150,000 for joint filers) for specified service trade or businesses, and adds a minimum deduction of $400 for taxpayers with at least $1,000 of QBI from an active trade or business, adjusted for inflation.
  3. Immediate Expensing of R&D Costs (Section 174) – Businesses can immediately expense domestic research and experimental (R&E) expenditures subject to limitations for tax years beginning after December 31, 2024, reversing a previous requirement to capitalize and amortize them over five years. This is especially beneficial for startups and tech-driven small businesses investing in innovation, as it reduces the upfront tax burdens and encourages R&D investment.
  4. Extended Tax Credit for Paid Family and Medical Leave - The Tax Cuts and Jobs Act (TCJA) of 2017 created a paid family and medical leave (PFML) tax credit that was set to expire at the end of 2025. The OBBBA makes this existing credit permanent. This provides a financial incentive for small businesses to support employee well-being and retention, helping them stay competitive with larger firms that already offer such benefits.
  5. Temporary Deductions of Taxes on Tips, Overtime, and Car Loan Interest - Through 2028, the bill temporarily allows for deductions for up to $25,000 in qualifying tip income, up to $12,500 ($25,000 for joint filers) in overtime pay premiums, and up to $10,000 in car loan interest for US-assembled vehicles.  These deductions are subject to other limitations and phase-outs for individuals earning above certain income thresholds, such as $150,000 for tips and overtime, and $100,000 for car loan interest deductions.  These provisions aim to increase take-home pay for tipped and hourly workers and potentially stimulate the purchase of American-made cars. 

These five changes represent a meaningful shift in how small businesses and entrepreneurs can plan, invest, and grow. Whether it’s through enhanced deductions, expanded eligibility, or new credits that support innovation and employee well-being, this bill offers a toolkit for resilience and reinvention. As always, it’s wise to consult with a tax advisor to understand how these updates apply to your specific situation—and to make the most of what’s now available.

Current clients should contact their engagement team member to discuss the potential impact of the new tax bill and related planning. All other inquiries should be directed to Jeff Mitchell ([email protected]).

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